401(k) Audit Services in Augusta-Richmond County, GA. For Augusta-Richmond County, GA businesses offering their employees retirement plans, navigating a 401(k) audit can feel like a daunting task. Between regulation from the Department of Labor (DOL) and IRS, collecting extensive documentation, and ensuring that your plan isn’t “top-heavy”, there are many factors to consider. However, with the right support, the 401(k) audit can be made much easier and affect your daily business activities.
At Correct Capital, we understand that 401(k) audits can cause considerable frustration and are a regulatory requirement. Our team will partner with you with every aspect of document collection through making sure Form 5500 is filed correctly and on time. Whether you're navigating your first audit in Augusta-Richmond County, GA, or seeking to simplify a process that's usually a burden, we're here to ensure it’s as smooth and easy as possible. You can book a meeting with a member of our advisor team, fill out our online form, or call us at 877-930-401(k) to get started.
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What is a 401(k) Audit?
A 401(k) audit is an annual review required for Augusta-Richmond County, GA companies who have more than 100 eligible participants in their 401(k) plan. Note: Even if you do not have more than 100 employees actively enrolled in the plan, you are still required to have an audit if there are 100 who are eligible. The audit ensures that the retirement plan follows the regulations set by the Department of Labor (DOL) and the Employee Retirement Income Security Act (ERISA). It assesses the plan’s overall financial health, ensuring that employee contributions, distributions, and plan activities are accurately represented.
While required for regulatory purposes, 401(k) audits can be complicated and demanding. Correct Capital helps Augusta-Richmond County, GA businesses get ready for these audits by helping with document collection, ensuring comprehension of compliance testing, etc... With the right support, getting through the audit can become a much easier process.
Why are 401(k) Audits Necessary for Augusta-Richmond County, GA Companies?
You are required to undergo a 401(k) audit for multiple purposes, ensuring that retirement plans stay in line with federal regulations and protect both the employer and employees. Here’s why they are necessary:
- Compliance with DOL and IRS Regulations: Audits ensure that your 401(k) plan adheres to all legal requirements mandated by the Department of Labor (DOL) and the IRS, particularly under the Employee Retirement Income Security Act (ERISA).
- Preventing Discrimination: The audit verifies whether the plan does not unfairly favor higher-paid employees (often known as “top-heavy” testing) to guarantee fairness across all participants.
- Identifying Operational Issues: Audits may reveal errors in employee contributions, withdrawals, or additional plan operations, providing an opportunity to fix these issues so they don't lead to penalties.
- Filing Form 5500: The audit guarantees proper and timely submission of Form 5500, a required document detailing the plan’s financial status, which is required to maintain compliance with DOL and IRS regulations.
- Contribution Limits: The audit ensures that employer and employee contributions do not exceed IRS limits for the year, reducing the risk of excess contributions that may result in penalties.
- Fee Reasonableness: Auditors may evaluate plan fees to confirm they are reasonable and aren’t unnecessarily high for participants. Overpriced fees could lead to compliance concerns and negatively impact how employees' investments and savings perform.
- Fiduciary Oversight: The audit ensures that Augusta-Richmond County, GA employers are acting in the best interest of plan participants, fulfilling their fiduciary responsibilities as outlined in ERISA.
- Verification of Plan Documentation: Confirming that the plan's documents, policies, and operational practices are in compliance with regulatory guidelines is one of the most important parts of the audit.
Types of 401(k) Audits
There are two kinds of 401(k) audits that Augusta-Richmond County, GA employers could face, based on the specific details of their plan. The audit type typically depends on the number of participants and the complexity of the investments in the plan.
- Full-Scope Audit: This is the more comprehensive audit necessary for most larger 401(k) plans. In a full-scope audit, the third-party auditor examines every part of the plan, including financial statements, compliance with Department of Labor (DOL) and IRS regulations, and participant data. The auditor examines supporting documentation for contributions, withdrawls, and other transactions to ensure accuracy and compliance.
- Section 103(a)(3)(C)) Audit: Formerly known as a "Limited Scope Audit," these are for plans with investments held by a qualified, regulated financial institution (such as a bank or insurance company). The employer may be eligible for a limited-scope audit. In this type, the auditor does not need to audit the investment information verified by the financial institution, which can significantly reduce the audit’s complexity and cost. This could make it a preferable choice for some Augusta-Richmond County, GA businesses, as long as they meet the criteria.
The specific audit required depends on your plan’s specific details, like the nature of its investments. At Correct Capital, we will guide you to determine which type of audit your plan requires and ensure you're fully prepared for both audit types.
401(k) Audit Pain Points for Augusta-Richmond County, GA Employers
While 401(k) audits are necessary for compliance, they can create major obstacles for Augusta-Richmond County, GA employers, especially those running bigger 401(k) plans. Here are some of the key pain points that employers encounter:
- Document Collection and Management: Assembling the necessary paperwork, such as account statements, tax returns, and employee data, can be time-consuming. Employers may find it challenging to sort through and file the necessary paperwork, particularly with larger, more complex plans.
- Compliance with Changing Regulations: Keeping pace with evolving DOL, IRS, and ERISA regulations can be challenging. Compliance missteps can result in audit failures, penalties, and expensive fixes later on.
- Discrimination Testing: Verifying that the plan isn’t top-heavy involves detailed compliance reviews and can necessitate additional documentation and reporting.
- Time and Resource Demands: Preparing for an audit draws HR professionals, business owners, administrators, and others away from their core responsibilities, increasing stress and distracting them from regular business activities.
- Form 5500 and Timely Submissions: Many businesses face challenges when they file Form 5500 properly and punctually, which is a key component of 401(k) compliance. Missing the deadline may lead to penalties and complicate things for the company.
At Correct Capital, we are aware of the difficulties involved and offer customized assistance to streamline the audit procedure in Augusta-Richmond County, GA. From assisting with document collection or verifying adherence to regulations, our team helps take the burden off your shoulders.
401(k) Audits for Multiple Employer Plans (MEP) and Pooled Employer Plans (PEP)
For Augusta-Richmond County, GA employers looking to lower the complexity of a 401(k) audit, Multiple Employer Plans (MEP) and Pooled Employer Plans can ease the process. These plans permit various businesses to participate in a unified 401(k) plan, reducing the need for employer-specific audits.
- Multiple Employer Plans (MEP): These plans combine several unrelated employers into one 401(k) plan, lowering the expenses and simplifying the management of managing and auditing individual plans. This setup enables Augusta-Richmond County, GA businesses to divide the administrative responsibilities and often sidestep the annual 401(k) audit altogether.
- Pooled Employer Plans (PEP): Introduced more recently, PEPs allow unrelated employers to join a shared 401(k) plan managed by a pooled plan provider (PPP). This structure makes meeting regulations easier and cuts costs, making it attractive for Augusta-Richmond County, GA businesses seeking to simplify their retirement offerings.
Both MEPs and PEPs can substantially decrease the costs and time required for audits, all while maintaining adherence to regulations. Transitioning into an MEP or PEP may be particularly attractive for small companies in Augusta-Richmond County, GA, who wish to provide a 401(k) plan but are overwhelmed by costs and admin tasks.
Working with the Right Augusta-Richmond County, GA 401(k) Audit Team
401(k) audits can appear challenging, but choosing the right support can greatly improve the process. Collaborating with experts that has a firm grasp of both technical and practical elements of the audit process helps you avoid unnecessary delays and anxiety. Here’s why partnering with the right experts matters:
- Experience and Expertise: A team of experts understands the nuances of 401(k) audits, including both full-scope and limited-scope audits. We help you navigate the documentation process and help identify areas of improvement within your plan.
- Compliance Assurance: The right team will help you stay on top of evolving regulations, ensuring that your plan meets all necessary standards.
- Tailored Support: Each 401(k) plan has unique requirements. An experienced team will collaborate with you to identify the unique needs of your plan and guide you in preparing for your specific audit requirements. Correct Capital currently manages over 37 plans in both small and large companies, and represents over $212 million in total plan assets across the United States, which allows us to understand the nuances of any company 401(k) plan.
- Saving Time and Resources: Getting ready for a 401(k) audit can take considerable time away from day-to-day operations. The proper team will take on much of the administrative burden, allowing your HR and finance teams the freedom to concentrate on other tasks. Correct Capital makes the process smoother, reducing the pressure on your internal team.
- MEPs and PEPs Expertise: For businesses participating in an MEP or PEP, while an separate audit is no longer necessary, you're still obligated to adhere to all the rules and regulations, though with a reduced administrative workload after plan year end.
*as of March 2024
Collaborating with a knowledgeable, reliable team is essential to making sure your 401(k) audit in Augusta-Richmond County, GA runs efficiently and stress-free. With Correct Capital by your side, you’ll have the confidence that your audit will be conducted thoroughly and on time.
Call Correct Capital for Help With Your 401(k) Audit in Augusta-Richmond County, GA
Complying with 401(k) audits is both a legal requirement and an important way to confirm your Augusta-Richmond County, GA company's retirement plan continues to offer maximum benefit to your employees. Correct Capital’s expertise in guiding Augusta-Richmond County, GA businesses navigate the 401(k) audit helps ease the burden, allowing you to focus on your business while ensuring you're not penalized for non-compliance.
Contact Correct Capital today to book a meeting and let us help you prepare for a smooth, efficient audit. Our team of experts will help with all aspects from document collection through to compliance checks, ensuring your plan is fully optimized. You can schedule a meeting with a member of our Augusta-Richmond County, GA advisor team, contact us online, or call us at 877-930-401(k) to begin.
